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Contents
- Preliminary Material
- Main Text
- General Introduction
- Part I Setting Up a Letter of Credit Transaction
- Preliminary Material
- 1 Business Framework of the Credit Device
- A Essential Purpose of Credit Vis-à-Vis Other Means of Payment
- B Legal Status of the UCP in Credits
- C Credit Terminologies and Certain of Their Functions
- 1.24
- (1) Presumed irrevocability of the undertaking in the credit
- (2) Unconfirmed and confirmed credit distinguished
- (3) ‘Nominated bank’ defined
- (4) ‘Honour’
- (5) Modes of availability
- (6) ‘Clean credit’
- (7) Red clause credit
- (8) Other ways of employing credits
- D Conclusion
- 2 Parties’ Roles in the Credit Opening Process
- A General
- B Completing an Application for a Credit
- C Assessing the Completed Application for Credit
- (1) Commonplace considerations
- (2) Bank’s obligation during its evaluation of the application
- 2.11
- (a) Source of obligation
- (b) General rule
- (c) Exceptions to the general rule
- 2.14
- 2.15 Discharge of duty to inspect application with due care
- Onus of proof of due care.
- 2.18 Negligence or estoppel operating against putative applicant present context , a forged
- 2.19 Applicant’s knowledge or suspicion of deception
- (iv) Applicant’s substantial contribution to forgery of signature
- 2.22 Fraudulent applicant’s apparent authority to submit application
- D Issuance of Credit to Beneficiary on an Accepted Application
- 2.23
- (1) Introduction
- (2) Can the bank be obliged to the intended beneficiary to issue credit?
- (3) Fraudulent tested telex or SWIFT credit in beneficiary’s hands
- (4) Moment of issue of credit
- (5) The time for issuing credit to the intended beneficiary
- E Advising of Credit
- F Effect of an Issued and Duly Advised Credit
- 2.71
- (1) Liability of applicant to pay the purchase price or repay the loan
- 2.72
- (a) McNair J.’s view in the Soproma case
- (b) The orthodox position
- (c) Extinguishment of applicant’s liability for the purchase price or repayment of the loan
- (2) Applicant’s promise to put the issuer in funds to honour credit
- 3 Consequences of Failure to Issue a Conforming Credit
- 3.01
- 3.02
- A Beneficiary’s Duty upon Receipt of a Non-conforming Credit
- B Liability for the Non-issuance of a Conforming Credit
- 3.20
- (1) Beneficiary’s claim
- (2) Applicant’s potential cause of action
- 3.45
- (a) Applicability of the disclaimers in Articles 35 and 37 of the UCP 600
- (b) History and development of the disclaimer clauses
- (c) Effectiveness of the disclaimer clauses at common law
- (d) Validity of the disclaimer clause under the Unfair Contract Terms Act
- (e) Scope of relevance of the disclaimer clauses to non-UCP incorporating credits
- C Conclusion
- Part II Proper Performance under the Operative Credit
- Preliminary Material
- 4 Presenting Documents to Draw on the Credit
- A An Overview of the Process
- B Who is to Present Documents for Honour or Negotiation?
- C The Bank to Which Documents are To Be Presented
- D Medium of Delivering Documents
- E Timeliness of Presentation
- 4.44
- (1) Preliminary points as to what constitutes a timely presentation
- (2) Requisites of Article 29 (a) of the UCP 600
- (3) Presentation during regular banking hours
- (4) Presentation outside regular banking hours
- (5) A nominated bank’s timely honour or negotiation of documents
- (6) Timeous delivery of transport documents
- F Presentation Documents Missing or Delayed in Transit
- G Conclusion
- 5 Presentee Bank’s Document Examination Duties
- A Preliminary Matters of Concern to a Reasonably Prudent Presentee Bank
- B Sources of Banking Practice Involved in Document Examination
- C Standard of Care and Diligence Required of the Presentee Bank
- D Examining Issuing Bank’s Right to Consult the Applicant
- E The Timescale for Completing Examination of the Documents
- F Conclusion
- 6 Conceptual Criteria for Identifying Conforming Documents
- A Introduction
- B Rationale Behind Strict Documentary Compliance Doctrine
- C Business Common Sense Underpinnings of the Doctrine
- D Credit Agreement Clauses Allegedly Entitling Issuer to Reimbursement Despite Discrepancies in Documents
- 7 Requirements for Specific Modes of Documentation
- 7.01
- 7.02
- A Date of Issuance of Document
- B Inclusion of the Particulars of the Applicant and Beneficiary in Documents
- C Constituents of Original Documents and Copies
- D Particular Types of Documents
- 7.20
- 7.21
- 7.22
- (1) Commercial invoice
- (2) Bill of lading
- (a) Introduction
- (b) Traditional lines differentiating ‘order bill’ from ‘straight bill’
- (c) ‘Bill of lading date’ and ‘date of shipment’ distinguished
- (d) Effect of a clause in a bill of lading providing for trans-shipment
- (e) Is it material that a straight bill is tendered instead of an order bill?
- (f) Must a full set of the bill of lading be presented?
- (g) What amounts to a ‘clean bill of lading’?
- (h) When is a bill of lading treated as ‘shipped’?
- (i) How may the carrier be properly identified in the bill of lading?
- E Conclusion
- 8 Unavailable Stipulated Document
- 8.01
- 8.02
- A Supervening Events Rendering a Document Unobtainable
- B Draft Drawn on Credit Applicant
- C Certificate from a Named Party
- 8.12
- 8.13
- (1) Presentation deficient in beneficiary’s or nominated bank’s certificate
- (2) Applicant’s non-issuance of the required document
- 8.18
- 8.19
- 8.20
- 8.21
- (a) Issuer’s right to insist upon presentation of the document
- (b) Issuer’s cancellation of credit following applicant’s non-issuance of document
- (c) Applicant’s non-issuance of the document as a breach of contract
- (d) Enforceability of non-issuance of document against a sovereign credit applicant
- (e) An order directing applicant to release the document
- (3) Issuing bank’s non-issuance of a required document to beneficiary
- (4) Non-issuance of document by a party outside the credit scene
- D Non-presentation of a Document Evidencing Fulfilment of a Non-documentary Term
- 9 Procedures for Handling a Non-complying Presentation
- A Introduction
- B Bank’s Task upon Verifying that a Presentation is in Good Order
- C Courses of Action Open to the Presentee Bank if the Tender is Faulty
- D Requisites for an Effective Rejection Notice
- 9.12
- 9.13
- 9.14
- 9.15
- 9.16
- 9.17
- (1) The point in time when a rejection notice is presumed given
- (2) Materiality of a statement communicating refusal of payment
- (3) The extent of the obligation to communicate discrepancies
- (4) Theoretical basis of the single notice of discrepancies rule
- (5) Regularity of an advice on the fate of dishonoured documents
- E Effect of the Disposal Statement in a Rejection Notice
- F Conclusion
- Part III Contract Choice of Law Issues
- Preliminary Material
- 10 The Law Applicable to Beneficiary’s Presentation for Payment
- A Prevailing Approaches in the United States
- B The Position at Common Law and under the Rome I Regulation
- C Conclusion
- 11 Nominated Bank’s Right of Reimbursement
- A Some Background
- B Advising Bank that has Honoured Documents on Issuing Bank’s Behalf
- C Confirming Bank’s Claim for Reimbursement under a US Jurisdiction
- D Confirming Bank’s Claim at Common Law or under Rome I Regulation
- E Non-obligated Nominated Bank that has Purchased Documents in Its Own Right
- 11.77
- (1) Revised Article 5’s stance
- (2) The law governing the purchase at common law and under Rome I Regulation
- F Lex situs of a Debt Arising Out of the Letter of Credit
- G Conclusion
- Further Material
